Correlation Between ODP Corp and Naas Technology

Can any of the company-specific risk be diversified away by investing in both ODP Corp and Naas Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ODP Corp and Naas Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ODP Corp and Naas Technology ADR, you can compare the effects of market volatilities on ODP Corp and Naas Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ODP Corp with a short position of Naas Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ODP Corp and Naas Technology.

Diversification Opportunities for ODP Corp and Naas Technology

0.71

Correlation Coefficient

ODP Corp  Naas Technology

Poor diversification

The 3 months correlation between ODP and Naas is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ODP Corp and Naas Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naas Technology ADR and ODP Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ODP Corp are associated (or correlated) with Naas Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naas Technology ADR has no effect on the direction of ODP Corp i.e., ODP Corp and Naas Technology go up and down completely randomly.

Pair Corralation between ODP Corp and Naas Technology

Considering the 90-day investment horizon ODP Corp is expected to generate 0.31 times more return on investment than Naas Technology. However, ODP Corp is 3.23 times less risky than Naas Technology. It trades about -0.04 of its potential returns per unit of risk. Naas Technology ADR is currently generating about -0.05 per unit of risk. If you would invest  4,918  in ODP Corp on October 10, 2024 and sell it today you would lose (2,683) from holding ODP Corp or give up 54.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ODP Corp  vs.  Naas Technology ADR

ODP Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ODP Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Naas Technology ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Naas Technology ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ODP Corp and Naas Technology

The main advantage of trading using opposite ODP Corp and Naas Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ODP Corp position performs unexpectedly, Naas Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Naas Technology will offset losses from the drop in Naas Technology's long position.

The idea behind ODP Corp and Naas Technology ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.